- "We believe the company will be able to restore its earnings power sooner than expected,' says Deutsche's David Ho in his AmEx (AXP +1.2%) upgrade, noting management now has "breathing room" to manage earnings expectations this year given a "minimal" revenue drag from Costco and efficiency gains coming online in H2.
- AmEx, he says, also has the largest amount of excess capital among consumer finance stocks, giving the company ample room to deploy capital to new partnerships, acquisitions, and eventually higher dividends and buybacks.
- Finally, at 13.7x 2016 estimates, American Express is being valued at a 30-35% discount to Visa and MasterCard.
- Previously: American Express up 1% as Deutsche buys the dip (Feb. 26)